Weekly jobless claims highest since February

WASHINGTON (MarketWatch) — The number of people applying for new jobless benefits rose more than expected in a report that added mixed data to an employment environment that has seen improvement in recent months.

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People walk into a job fair put on by Jobing.com in Fort Lauderdale, Fla.

The U.S. Department of Labor reported Thursday that initial claims for regular state unemployment-insurance benefits rose 16,000 to 357,000 in the week ended March 23, reaching the highest level since mid-February. Rising claims signal more layoffs, and initial claims have increased for two consecutive weeks.

However, analysts warn over reading too much into near-term claims levels because of week-to-week volatility and holiday-related distortion.

“It would take more readings in this neighborhood to point to a modest pick in layoffs,” wrote analysts at RDQ Economics in a research note. “We believe the claims data continue to signal a slowing in the rate of job layoffs in the first quarter of 2013.”

Economists had expected initial jobless claims for regular state unemployment-insurance benefits to rise to 339,000 from an original estimate of 336,000 in the prior week, according to a MarketWatch survey. Meanwhile, the average of new claims over the past month, which irons out weekly volatility, rose a modest 2,250 to 343,000.

On Thursday, the government revised the prior week’s level to 341,000.

Thursday’s report contrasts with some more positive reports in recent months.

Nonfarm employment has increased an average of 191,000 jobs over the past three months, slightly up from an average of 182,000 jobs in the prior three months. However, current employment remains three million jobs below the level at the start of the Great Recession.

Going forward, economists say large federal spending cuts making up the sequester could curb job growth.

While initial claims saw a large gain in the most recent report, continuing claims dropped. The number of people already receiving benefits fell 27,000 to 3.05 million in the week ended March 16, hitting the lowest level since June 2008. The four-week average of these continuing claims fell 13,000 to 3.07 million, also reaching the lowest level since June 2008.

Elsewhere Thursday, the U.S. Department of Commerce reported that the U.S. economy grew faster than previously believed, growing at an annualized pace of 0.4%, compared with a prior estimate of a 0.1%. Read more about GDP.

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